35 X Co purchased a non-current asset for $40 000 in the year ended 31 December...

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35 X Co purchased a non-current asset for $40 000 in the year ended 31 December 20X2 and chose to depreciate the asset over ten years with a full year's charge in the year of acquisition and none in the year of disposal During 20X7, X Co transferred the asset to its wholly owned subsidiary Y Co for $28 000 Y Co depreciates the asset by 10% per annum on the straight line basis with a full year's charge in the year of acquisition and none in the year of disposal What adjustment is required to group profit in the 20X7 financial statements in respect of this transfer? B C Which TWO of the following statements are incorrect? I A high inventory turnover period indicates slow moving items of stock, A fall in operating profit margin may be due to increased finance costs, The quick and current ratios are both measures of liquidity. Dividend cover shows the dividend paid in relation to the current share price of a share 11 IV A [ ] $6 800 increase 11 $6 800 reduction [ ] $9200 increase $9 200 reduction C ] I and II I and III II and III II and IV 35 X Co purchased a non-current asset for $40 000 in the year ended 31 December 20X2 and chose to depreciate the asset over ten years with a full year's charge in the year of acquisition and none in the year of disposal During 20X7, X Co transferred the asset to its wholly owned subsidiary Y Co for $28 000 Y Co depreciates the asset by 10% per annum on the straight line basis with a full year's charge in the year of acquisition and none in the year of disposal What adjustment is required to group profit in the 20X7 financial statements in respect of this transfer? B C Which TWO of the following statements are incorrect? I A high inventory turnover period indicates slow moving items of stock, A fall in operating profit margin may be due to increased finance costs, The quick and current ratios are both measures of liquidity. Dividend cover shows the dividend paid in relation to the current share price of a share 11 IV A [ ] $6 800 increase 11 $6 800 reduction [ ] $9200 increase $9 200 reduction C ] I and II I and III II and III II and IV

Answer rating: 100% (QA)

Adjustment Required Answer 6000 reduction Explanation X Co initially recorded the asset at 40000 Upo... View the full answer